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Reducing a benefit overpayment

(also known as claiming Underlying Entitlement)

Claiming Underlying Entitlement could help reduce the amount that you need to pay back.

If you did not inform us of a change in your circumstances during your claim and an overpayment is subsequently created, you may be able to reduce the amount of the overpayment by making a claim for Underlying Entitlement. To do this you would need to provide evidence of all your household income, savings and investments for the period of the overpayment, and we would then assess the amount of benefit that you would have been entitled to if we had known your correct circumstances for the period of the overpayment.

If we award benefit for the period of an overpayment it is called Underlying Entitlement and we will use it to reduce the total amount of overpaid benefit. For example, if you start work, but don't tell us all of the information we need about your new circumstances, we will cancel your claim and there could be a benefit overpayment. If you then give us evidence that you were receiving a low wage for the period of the overpayment and we are able re-calculate your claim, if it turns out that you would have been entitled to at least some benefit for the period, we can offset that new entitlement against the original overpayment amount.

An example of Underlying Entitlement

John was claiming Housing Benefit (HB) and Job Seeker's Allowance (JSA).
On 3rd January John started work but he didn't tell the Housing Benefit office straight away.
John continued to receive HB as though he was still getting JSA until 14th March.

As a result, John has an overpayment of HB from 3rd January to 14th March of £1000 (£100 per week for 10 weeks).

John's wage for his job means that he will still qualify for some HB for the period he has been overpaid HB. John sends in a Housing Benefit application form with proof of his wages for the period 3rd January to 14th March. The Housing Benefit office calculates that John is entitled to £80 per week for this time, a total of £800. This reduces his overpayment from £1000 to £200.

This is an example of Underlying Entitlement.

When you are notified of a benefit overpayment, you will also be notified of any eligibility you may have to make a claim for Underlying Entitlement. To make a claim, you’ll need to complete a new claim form for the period of the overpayment and also provide documentary evidence of all your household income and savings for the relevant overpayment period. Without sufficient evidence of income and savings, it is not possible to assess a claim for Underlying Entitlement and overpayments will remain recoverable in full.

If your claim for Underlying Entitlement is successful, the amount you qualify for will be deducted from your original overpayment and you will be notified of the remaining overpayment balance that you’ll need to pay back. Where appropriate, a revised benefit invoice for the reduced amount will be issued.

If you are not sure about your eligibility to make a claim for Underlying Entitlement or if you need more information on how to make a claim, contact the Benefits Service for assistance.